Based on our Global 2019 Benchmark Survey, increased competition and downward price pressure are two major issues currently faced by MSPs. When you think about it, these are to be expected in a rapidly growing market with relatively low barriers to entry. More service providers enter the market, and prospective clients compare their many options. Since the suite of services offered between MSPs are generally undifferentiated (commoditized), the most salient variable when choosing a service provider becomes price.
In a world filled with competing options, it’s easy to get lost in the shuffle—especially when your MSP is just finding its footing. While it can seem impossible to compete with long-standing MSPs striving for a monopoly, a modestly-sized MSP has its advantages. Agility and the ability to respond immediately to market conditions positions you at an advantage when differentiating yourself from the competition and justifying a premium fee for service. Providing a high level of service is no longer enough, so with that in mind, here are 6 ways to differentiate your MSP.
Develop a unique selling proposition
I wish I could, but I can’t tell you what this should be for your MSP. This is something unique to you and something only you can uncover. What I can do is provide advice on how to determine what this could be.
Understanding the competitive landscape is key. Where are your competitors located, what services do they offer? Do they specialize in a vertical? How do they communicate with their audiences? What are their strengths and weaknesses? With this context, you can turn the spotlight on your MSP. If you haven’t already, the classic SWOT analysis is something every business should complete. It’s simple, straightforward, and forces you to analyze and spell out the state of your business. The final step is understanding your core customer. The needs and perceptions uncovered here are invaluable. What do they like? What do they need? What are their biggest frustrations?
At this point, give yourself a pat on the back. You’ve successfully mapped out the information you need to determine how to set your MSP apart. Now you can tailor what services you offer and how you deliver your services so that you meet your clients’ needs, and are differentiated in the market. Think about how to fundamentally make your service offering unique, and throw in some things that will delight your clients.
Focus on your branding
First impressions are made in one-tenth of a second, and companies are not an exception to this rule. If your visual branding looks cheap, outdated, inconsistent, and is forgettable, your company will be perceived as such. Yes, it’s superficial and really has no bearing on the quality of your MSP, however, it’s one of the visual cues that people are presented with right off the bat. It’s worth investing the money in having a professional designer create your visual identity, brand-language, website, and templates for communication materials.
Establish a personal connection
Nurturing relationships with your clients takes effort, but the payback is ten-fold. Not only does it build out the experience of working with your MSP, but it also establishes an emotional connection. Having this encourages trust and loyalty, and as a result reduces the rate of churn your MSP may experience. Having regular check-ins also makes your clients feel like you have their back, and increases the opportunities for positive interactions, rather than clients only contacting your MSP when something goes wrong. This tips the balance in favor of positive experiences.
Another added benefit is that you open the channel of communication. If you’re doing something that makes them happy or something that could be done better, they’re more likely to feel comfortable saying this to you. Your customers are your best source of consumer insights, and can also be the most valuable advocates for your MSP, driving more business your way.
Design your marketing and sales
You won’t increase your client base if you’re not increasing the visibility of your MSP. Whether or not you should have a dedicated marketing and sales team depends on the size of your MSP and goals for scaling your business. That said, you should always have marketing and sales initiatives.
Design a sales funnel and understand the thought process prospects take when evaluating MSPs before deciding whether to sign a contract. Align your website design and inbound marketing initiatives to support their decision-making process and facilitate their movement through the funnel.
Communicate your value proposition with clarity and concision. When you try and say too much, your messaging becomes too diffuse and won’t stick with your audience. Speak the language of your clients and position your services as being solutions to problems and complications they face. Be sure to use verbiage that is dynamic without being gimmicky, and above all, demonstrate flexibility to tailor your services to the needs of the client. There’s no one-size-fits-all solution.
Optimize your onboarding experience
The onboarding process sets the tone for the relationship. It should be streamlined, efficient and standardized. You are delivering a suite of services, and if there are inconsistent levels of service, your MSPs reputation will take a hit. This is where the quality of your workforce comes into effect. Just as the bedside manner of a general practitioner impacts the perceived quality of healthcare delivered, the technician making the site visit should have the skill to build a rapport with the client.
This initial site visit is when you collect the information necessary to build out and take care of the client’s network. You don’t want to have to make multiple visits to fill in information gaps if the first visit wasn’t comprehensive enough. Deploying a tool like Network Glue is extremely helpful since it minimizes the time requirements for mapping out the client’s network, and ensures that you always have an up-to-date diagram and documentation of all network devices. When you have the complete picture right from the get-go, you can troubleshoot efficiently and effectively.
Everyone wants to feel appreciated. Celebrate anniversaries, give free upgrades, or develop a point-based system. It doesn’t have to be complicated, but it does have to mean something to your clients. Consider giving a percentage discount off your fee-for-service based on the number of years a client has stayed with you. While giving a discount makes you miss out on annually recurring revenue, it can extend the customer lifetime value of your clients. When you compare the revenue lost to the long-term revenue gained from incentivizing a customer to stay, the dollars and cents talk. Plus, the expense of attracting new clients far exceeds the expense of thanking a customer for their years of loyalty.
The IT Glue Global MSP Benchmark Report is a comprehensive analysis of the state of the managed services industry as a whole, and the companies that comprise it. Our report features not just the stats from the survey, but in-depth analysis that will help you make sense of the raw data.